Chinese smartphone giant Xiaomi has made a significant stride into the electric vehicle (EV) market with its inaugural offering, the SU7. The company announced that it has already received more than 1,00,000 orders for the SU7 as it commences deliveries.
This milestone arrives alongside the unveiling of the first batch of 5,000 SU7 cars, termed the “founders edition,” which have been produced and distributed across 28 Chinese cities.
Priced competitively at under USD 30,000 for the base model, the SU7 looks to disrupt the Chinese EV market, which could present a formidable challenge to established players like Tesla’s Model 3. Xiaomi’s strategic positioning leverages its expertise in smartphones, particularly in developing smart dashboard features, catering to the preferences of Chinese consumers.
Despite entering a crowded and fiercely competitive market, Xiaomi has strong early interest evidenced by the overwhelming number of pre-orders. Potential buyers have been advised of potential wait times ranging from four to seven months, indicating robust demand for the SU7.
However, analysts maintain a cautious outlook on Xiaomi’s foray into the EV sector, citing potential financial losses. Citi Research estimated that Xiaomi could face a net loss of 4.1 billion yuan (USD 566.82 million) this year, with an average loss of 68,000 yuan (USD 9,400.96) per car, based on projected sales volumes.
Xiaomi’s CEO Lei Jun’s ambitious commitment of USD 10 billion to the auto business further stresses the company’s dedication to this venture. Lei Jun, who announced Xiaomi’s entry into EVs in 2021, positioned the endeavour as “the last major entrepreneurship project” of his life.
In response to Xiaomi’s entry into the EV market, other Chinese brands have announced price cuts and subsidies for their comparable models. The intensifying competition within the 2,00,000-to-3,00,000-yuan segment signals a challenging landscape, with an expected increase in the number of EV models vying for sales.
